U.K. Tidal-Power Developer Plans Option Cheaper Than Swansea Bayby
Natural Energy Wyre’s project seen costing 250 million pounds
Company talking with government for a contract for difference
Natural Energy Wyre Ltd., a U.K.-based renewable-energy developer, said it wants to build a 120-megawatt tidal energy project that could dramatically lower the cost of energy generated by the sea.
Installing turbines on the the River Wyre in northwest England could harness tidal power flowing into and from the Irish sea four times a day. The company’s 250 million pound ($329 million) proposed project would capture power from tides that rise 11 meters in the spring and around 10 meters the rest of the year.
While U.K. coastlines have good potential for tidal energy, developers have sought government subsidies to balance against the high costs of early-stage technologies. A planned 320 megawatt Swansea Bay tidal-lagoon could cost 1.3 billion-pound ($1.7 billion) and need government loan guarantees to be built.
“We think it’s the most affordable project of its kind, especially compared with Swansea tidal lagoon,” said Natural Energy’s managing director Bob Long. “The U.K. has a lot of potential for this technology, for example a river by Bristol has a tidal range of 12 meters.”
The company is seeking a contract for difference of 110 pounds a megawatt-hour for the first project, according to Long. The cost can probably be brought down to 100 pounds a megawatt-hour in subsequent projects, after the technology matures and higher volumes of power are produced, he said.
Natural Energy Wyre was negotiating with the U.K. Department of Energy & Climate Change before it was disbanded by Prime Minister Theresa May last month and Long said he wants discussions to recommence soon with the new government.
The company seeks to raise 12 million pounds by autumn to begin development. The River Wyre project is expected to be financed with a debt to equity ratio of 50/50. Natural Energy Wyre works with HSBC Holdings Plc and may secure a loan from them, according to Long, who added the project’s equity investors include high-net-worth individuals.